Churches, non-profits could profit politically under House tax bill

A last-minute addition to the House tax bill would make it easier for houses of worship to engage in political activity. Wilfredo LeeAP

A last-minute addition to the House tax bill would make it easier for houses of worship to engage in political activity. Wilfredo LeeAP

WASHINGTON

Not only would houses of worship be able to more actively promote political candidates, but so would non-profit groups under a section inserted into the House tax bill an hour before it was due for a key vote.

The last-minute change affecting the so-called Johnson amendment was tucked into a 292-page “manager’s amendment” to the GOP tax plan by House Ways and Means Committee Chair Kevin Brady, R-Texas. The House will vote on the entire tax plan next week. It’s expected to pass easily.

The change pleased faith-based conservatives and infuriated campaign finance reformers and groups advocating separation of church and state.

“This would allow churches to become political organizations, said Howard Gleckman, a senior fellow at the Tax Policy Center of the Urban Institute and Brookings Institution.

Faith-based groups had complained that Brady’s initial attempt to alter the 1954 Johnson amendment, which bars churches and 501 (c) (3) non-profit groups from supporting or opposing political candidates, didn’t go far enough and was too narrow because it didn’t apply to tax-exempt non-profit groups such as charities.

Brady’s new language allows the non-profit organizations to engage in political activities.

Under current Internal Revenue Service regulations, 501 (c) (3) organizations must serve a public purpose, cannot benefit private interests, and are limited in the amount of political activity and lobbying they can do.

“We think it’s important to be able to protect churches and pastors in the ability to endorse candidates, but we also think it’s a matter of equity and fairness to allow all non-profits to have free speech protections,” said David Christensen, Family Research Council vice president of government affairs. “They should be able to endorse, or not, as they see fit without the IRS threatening to punish them.”

Advocates for the separation of church, as well as state and campaign finance watchdog groups, were livid.

They called the changes payback to faith-based organizations and voters who supported Donald Trump for president.

Trump made abolishing the Johnson amendment a cornerstone of his campaign pitch to Christian conservative and evangelical voters. The president vowed at a National Prayer Breakfast in February that he would “totally destroy” the amendment.

Some campaign finance and tax policy experts said this week that altering or eliminating the Johnson amendment could effectively make houses of worship and other non-profits political operations.

“This, presumably, would encourage some people to give to churches in order to further their political interests and those contributions would be tax deductible,” Gleckman said.

Maggie Garrett, legislative director for Americans United for the Separation of Church and State, said Brady’s attempt to retool his original Johnson amendment modification is making matters worse.

“Allowing tax-exempt groups, whether religious or secular, to jump into partisan elections is a bad idea,” Garrett said. “The way to fix this bad idea is by abandoning it, not expanding it.”

House Democrats tried to kill Brady’s initial Johnson amendment rollback, quoting a Joint Committee on Taxation analysis that said repealing the amendment would cost the federal government about $2 billion over 10 years.

The loss of revenue would come from a shift of non-deductible contributions to political candidates and campaigns to deductible donations to houses of worship and other 501 (c)(3) groups, Joint Committee on Taxation Chief of Staff Thomas Barthold told the Ways and Means committee this week.

An amendment by Rep. John Lewis, D-Ga., in the Ways and Means committee earlier this week to rebuff Brady’s measure was defeated by a 16-23 vote.

Senate Republicans unveiled their tax plan this week and didn’t include the House’s Johnson amendment language. Senators plan to write their own tax bill next week.

Supporters of modifying or abolishing the Johnson amendment are talking to senators and have identified Sen. James Lankford, R-Okla., as a key ally.

Lankford and House Majority Whip Steve Scalise, R-La., introduced a bill in February that would amend the tax code and make it easier for non-profit charitable organizations to make political comments. However, they would not be able to make contributions to candidates or campaigns under the bill.

Lankford said he hoped that language from his bill would work its way into the Senate GOP tax plan, adding that “we’re working in that direction.”